Lathfield Investments, LLC, et al. v. City of Lathrup Village, Michigan

The City of Lathrup Village, Michigan, prohibits leasing commercial property without a license. But the City will not issue a license unless the property owner first discloses the names of prospective tenants and a description of the tenants’ principal business activity. Petitioners omitted this information in a license application to comply with a nondisclosure provision in its lease agreements, were denied a license, and are therefore prohibited from renting their property. They sued under 42 U.S.C. § 1983, challenging the disclosure requirement as an unconstitutional “Law impairing the Obligation of Contracts.” U.S. Const. art. I, § 10. The Sixth Circuit, joining the Fourth, held that “an alleged Contracts Clause violation cannot give rise to a cause of action under § 1983.” App. 37a. In contrast, the Second, Third, Eighth, and Ninth circuits have concluded either expressly or implicitly that a Contracts Clause claim may be brought under Section 1983. The question presented is: Whether 42 U.S.C. § 1983 provides a cause of action for a Contracts Clause claim.